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Overseas Property Market In Greece Just About Wiped Out By Taxes

Property taxes in Greece have been pushed by almost 600 per cent over the past three years as the government has levied higher rates of tax for people who are not able to evade them. ASNA, a news agency in the country reported that the government was to blame for allowing the escape of tax evaders while increasing stress on the poor, pensioners and workers who have had to come to terms with slashed pension, tax hikes and pay cuts. Property taxes have been soaring in Greece, and this has had an adverse effect on foreigners and property buyers, who were scared away from investing in Greek properties. Analysts say that property taxes have been on the rise due to the government’s inefficiency to take action against tax evaders.

Figures Speak Volumes

According to the figures, Greece collected property taxes worth 2.75 billion Euros last year, compared to 526 million three years ago. The state is expected to collect 3.2 billion Euros in 2013 – six times the amount generated in 2010! Currently, Greece has forty different taxes related to property. There are over 2000 Greeks who have secret deposits worth $1.95 million in HSBCs Swiss branch in Geneva, and the government has failed to check for the possibility of tax evasion as of now.

Tough Economic Times

Stratos Paradias, the Chairman of POMIDA, said that a host of economic and other destructive factors have contributed to the property market’s collapse. These factors have also led to homeowners’ impoverishment as profits have been slipping away in recent times due to the economic turmoil, making them unable to afford the steadily increasing taxes. He added that several homeowners in the country are looking to ease their tax burdens by putting up their properties for sale. However, buyers are few and far between. The Kappa Institute of Research conducted a survey according to which 54 per cent of the 1400 plus respondents throughout the country, who are unable to pay property taxes, will be given three options – to pay taxes on one property by selling another, seek loans, or allow the property to be seized by the State.

Owning a Greek Property No Longer Favourable

The respondents under the microscope expressed their discontent towards the real estate market saying that profits were no longer earned from any of their properties, yet taxes had to be paid regularly. 25 per cent of the country’s population is currently finding it difficult to meet their loan payments, and an additional 48 per cent believe that it’s just a matter of time until they bite the proverbial bullet. A large number of Greek citizens (82.7 per cent) say that owning a property in the country is not worth it anymore. They believe that Greek real estate is counterproductive. Over 50 per cent of respondents say that renting a home in the country is better than owning one.

Paradias said that the current policy of property taxing is unreasonable, and that the government is heading for an economic catastrophe by wiping out the homeowners who are unable to meet the payment of new taxes.